Madam Speaker, thank you for giving me the opportunity to speak to Bill C-419, the credit card fairness act.
I also want to thank the hon. member for Lethbridge for allowing us to talk about fairness, transparency, and financial consumer protection. These files are important to our government. I am pleased to see that the hon. member shares the concerns that have been guiding our work since the beginning of our term in 2015.
Canadians know that it is not always easy to manage their relationship with their bank and other financial institutions. That is why the government ensures that year after year there are rigorous consumer protection standards in place to reassure Canadians when they make transactions and decisions on financial products and services.
Unfortunately, some of the proposals for the credit card products in Bill C-419, as presented, could harm or confuse Canadians.
As I will describe, our government has introduced a number of new consumer protection measures in the Budget Implementation Act, 2018, No. 2, or Bill C-86, to further empower and protect financial consumers of credit card products. In fact, with the new set of rules to protect Canadians when they deal with their banks, our government has put in place the most significant change since the creation of the Financial Consumer Agency of Canada in 2001.
Further, the Financial Consumer Agency Agency of Canada, or FCAC, has a number of tools available to raise awareness of credit and consumer debt issues, and is continually working to improve the financial literacy of Canadians.
However, the bill proposes that cardholders who leave as much as 5% of their balance unpaid in a month would pay reduced interest. This type of measure could encourage Canadians to carry a balance on their credit account and increase credit card indebtedness.
In contrast, existing credit card rules encourage Canadians to use credit cards responsibly. Borrowers who pay off their entire balance monthly benefit from a 21-day interest-free grace period. This incentivizes Canadians to pay their credit card bills in full without incurring interest costs.
Also, some specific measures that protect consumers are already in place in the Bank Act as they have already been introduced as part of the comprehensive package of measures included in our government's most recent Budget Implementation Act, 2018, No. 2, or Bill C-86, which received royal assent on December 13, 2018.
For example, Bill C-419 proposes to require a bank to obtain express consent from the consumer prior to increasing the credit limit on a credit card account and provide written confirmation in cases of oral consent. This requirement is already provided for in the existing protections.
Bill C-419 also proposes to require specific information disclosures in credit card advertisements, including the annual rate of interest. This is largely duplicative of the existing requirements, including the requirement to disclose in advertisements the annual rate of interest and non-interest charges.
On another front, some of the proposals could confuse or harm Canadians. They would go against the spirit of our reforms in last year's BIA to protect consumers when they deal with their banks.
Our government has taken concrete action with Bill C-86 to strengthen the rights of consumers and better address their interests when they deal with their banks.
Our government also introduced measures to improve the ability of the Financial Consumer Agency of Canada to protect consumers. This legislation received royal assent in December 2018, and included 60 new or enhanced measures to protect bank customers.
These measures include requiring banks to have policies in place to ensure that consumers receive products and services that are appropriate to their situation; requiring banks to notify consumers who might incur fees and inform them of steps they can take to avoid those fees; creating a new prohibition against presenting misleading information to consumers; and creating a new prohibition against exerting undue pressure on consumers when selling products or services.
These measures reflect best practices in the provinces and international jurisdictions, and represent the most significant change to financial consumer protection in Canada since the creation of the FCAC in 2001.
Before introducing Bill C-86, the government consulted with stakeholders, including provinces and territories, to develop these measures. I would like to spend some time on this important point.
This bill might not be well received by the provinces and territories, and especially by Quebec. Bill C-419 has not been the subject of much consultation with stakeholders, including the provincial and territorial governments. This is not what happened with Bill C-86, the budget implementation bill, which I was talking about earlier and which was the subject of extensive consultations with the provinces and territories. Consumer protection is an area in which both provincial and territorial governments and the federal government are active.
Several provinces, including Quebec, have comprehensive financial consumer protection rules. Consulting provinces and territories is crucial before introducing new measures to avoid conflict and duplication. The Government of Quebec and the National Assembly have made it very clear that any new federal rules must first be the subject of consultations in order to ensure that they respect provincial jurisdictions and will not have any unintended consequences. This is a lesson that everyone here in the House learned in the early days of this government, including the opposition. I cannot emphasize this point enough. It is very important that there be thorough consultations with the provinces before going ahead with a bill like this. In addition, major stakeholders, such as consumer groups, must be engaged in the process to ensure that there will not be any unintended consequences for consumers.
The list of measures I have described is only one part of what the government is doing to protect Canadians' interests. Let me go into more depth about other measures the government is taking.
The first is the Financial Consumer Agency of Canada's excellent work to raise awareness of credit card and consumer debt issues while also working to improve the financial literacy of Canadians.
The FCAC offers a range of online tools, educational materials and programs intended to help Canadians make informed financial decisions. It also has tools to help consumers understand how credit cards work and how to use them responsibly. For example, the FCAC offers a credit card payment calculator that lets Canadians explore different payment options and see the cost of only making minimum payments.
Beyond credit cards, our government is taking additional action to protect and empower financial consumers. We know that when Canadians have disputes with their banks, they deserve to have access to a resolution process that is fair and impartial. That is why bank consumers can take any complaints they cannot resolve with their banks to an independent body free of charge.
To ensure that the system is meeting Canadians' needs, the Financial Consumer Agency of Canada will conduct a review by June 2019 to assess the banks' complaints handling process and the effectiveness of the external complaints bodies.
In addition, to respond to the unique needs of Canada's aging population, the Financial Consumer Agency of Canada will engage with banks and seniors' groups to create a code of conduct to guide banks in their delivery of services to Canada's seniors. The Minister of Seniors will support this engagement.
Measures the government has taken recently are well-founded and will strengthen financial consumer protection. We are working with our community and industry partners, as well as the provinces and territories.
In conclusion, I would like to reiterate that the Government of Canada is absolutely dedicated to protecting consumers in their dealings with banks and to helping all Canadians achieve and maintain financial well-being by managing money and debt wisely and planning and saving for the future.
Guided by what matters most to Canadians, the government will continue to work to ensure that more Canadians are better off as we grow our economy today and over the long term. Due to the measures already contained in Bill C-86, and the other factors I have mentioned, such as appropriate and informed consultations with the provinces and territories, I recommend that my hon. colleagues oppose Bill C-419.